New York’s Casual White Supremacy
Losing the Plot on Hochul & Buffalo Bills.
SUMMARY: A run-of-the-mill, one-day news story about a billionaire holding a city hostage over a sports team and a new stadium buried the lede on the dark underbelly of Native American relations with the U.S. government. New York State agreed to finance a significant chunk of the $1.4 billion stadium for the Buffalo Bills, an NFL team owned by a billionaire worth 5.5x that amount. A deal done almost entirely behind closed doors. Beyond the myriad conflicts of interest within the governor’s office is the more insidious story, ignored almost entirely by the media, of where the state “found” the money to pay for it.
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You might be wondering what this has to do with New York and the Buffalo Bills.
But you wouldn’t know that from the recent coverage of the landmark deal the Bills organization just made with New York State and Governor Kathy Hochul. Let’s break it down by first understanding the deal and what the media’s take on it has been. I’m going to quote from a few prominent sources so you get the gist of what just happened and why some in New York are up in arms.
From the New York Times:
“New York State officials have reached a deal with the Buffalo Bills to use $850 million in public funds to help the team build a $1.4 billion stadium — the largest taxpayer contribution ever for a pro football facility.
“Under the deal, the state would finance $600 million of the construction costs, while Erie County, where the stadium will be built adjacent to its current home, would cover $250 million. The remainder would be financed through a $200 million loan from the N.F.L. that was approved on Monday, plus $350 million from the team’s owners.”
Here’s The Guardian:
“The Bills are expected to recoup part of their cost of construction by having season-ticket holders for the first time pay one-time seat-licensing charges, potentially doubling the price of their ticket package.”
And some additional color from the U.S. News:
“Anticipating pushback for committing taxpayer dollars to a private entity, Hochul noted the state’s commitment will be returned within 22 years through player salaries in tourism tax dollars, which directly generate $27 million in annual state income. Unlike the New York Giants and Jets, who play in New Jersey, the Bills are the NFL’s only franchise based in New York.
“Hochul also noted the state’s $600 million share covers less than half of the costs of the project, and she cited projections that stadium construction will create 10,000 union jobs.”
Politico, ESPN, NY Post, every paper in Buffalo. All the same stories with slight reporting twists like it was negotiated in secret, it’s less than other deals but still pretty steep, Hochul is from the area so this was personal, blah blah blah.
Only in the local papers in western New York will you read a little bit further into this story. But before we get there, let’s keep ripping this story apart as the mainstream has done. Because, don’t get me wrong, it’s a shitty enough story without the part that I’m going to rant about.
Chapter One: Billionaire Rules
Most of the coverage has this as another story about a billionaire sports franchise owner getting taxpayer dollars to support a private business that has little economic impact to the local region. This story has played out all over the nation for decades.
Billionaire owner floats the idea of building a new stadium but requires the support of the government to make it happen.
If the government, i.e. taxpayers, don’t help foot the bill they can just find another city all too happy to do so.
State jumps through burning hoops to get the deal done.
Stadium gets built, we pay for the bulk of it, proceeds mostly go to enrich the billionaire owner and the dollars raised through concessions and ticket sales inevitably wind up in the pockets of players who move around, large concessionaire companies domiciled elsewhere and the jobs they profess to bring are about as plentiful as a strip mall.
There’s typically enormous tax breaks that rob local municipalities for decades and the construction jobs are often filled by out of town contractors with some local union workers getting a small, yet brief piece of the pie.
An article in the Atlantic talks about efforts over the years to curtail the use of tax-free municipal bonds to finance stadiums including an unsuccessful attempt as early as 1986. The Obama administration also tried to take away any tax-free status for private stadium bonding, but it too failed. Even the Trump administration tucked in a provision to close this off but it was scuttled at the 11th hour in the new tax overhaul giving yet another gift to the billionaire class.
Most of the traditional media missed the classic attempt on the part of Bills owner Terry Pegula to quietly threaten the state if his demands weren’t met. But the sports publications picked up on it with outlets such as ESPN and Sports Illustrated reporting on the whisper campaign that Pegula’s organization started that there was interest from Austin, Texas.
SI called it an “old story” saying, “another billionaire will be holding their NFL city hostage in hopes of getting a new, publicly funded stadium in which to house their tax reduction machine.” Ouch. This was news to the local officials in Austin, by the way, but it was enough to pour gasoline on the fire and bring Hochul to the table.
So to review the math again, the new Buffalo Bills stadium to be built across the street from the current stadium, is going to run about $1.4 billion dollars. The state is taking on $600 million, Erie County, $250 million and the Pegula family is kicking in $350 million. This deal was such a fait accompli that the NFL already met and approved financing for the last $200 million.
Now to mere mortals, the $350 million that Pegula has to front still seems like a lot of money. And it is a lot of money. But here’s the thing. According to Bloomberg, owner Terry Pegula has a net worth of $7.9 billion and much of that is liquid as he made the bulk of his fortune selling his natural gas company for $5.3 billion. Today he owns the Bills, the Buffalo Sabres, a country music label and shit ton of real estate, with the Bills alone worth about $2.2 billion.
So of Pegula’s personal net worth, the $350 million represents about 4%. And here’s the kicker. They intend to recoup the bulk of it by charging a one-time fee to the loyal Bills fans to retain their season tickets. So by the time the stadium opens, they’ll have recouped their out-of-pocket expense and financed the balance of it in multiple sweetheart deals.
Hochul is pleased with herself because the state will also make that money back in direct payments. Here’s an excerpt from her press conference to show how she breaks it down and how long it will take to make back the state’s investment:
“In terms of direct revenue to the State of New York, over $19 million - and that number is going to continue [to] increase - that is what we account for from the income tax on the player’s salaries, again that is going to continue going up, as well as the additional money equating to a total $27 million of direct benefit because of sales tax from…hotel beds and restaurants and extra engagement in the community hospitality industry with out-of-town visitors coming from all over, from Canada and elsewhere, who come here, stay overnight and enjoy the experience. So that’s $27 million in direct payment to the state we anticipate and therefore when you take that in the context of a $600 million state share, our share is paid off after 22 years of a 30 year agreement.”
So the minute the billionaire opens the doors in 2026, he’ll have made his money back thanks to his loyal fan base. And he’ll have a fucking insane asset on his books to increase the valuation of the team and his personal net worth. The best estimates put forward by the state are that NY will recoup its investment in 20 years.
That’s why people are pissed. But it’s not why I’m pissed.
Chapter Two: Hidden from View
So we’ve established that the rules are now and forever tipped in favor of the billionaire class in this nation. Same old, same old. Roads with potholes, underfunded schools, homelessness, hunger. We scrape and claw for program scraps to help the most underserved populations yet can move mountains in secret negotiations to secure hundreds of millions of dollars for a sports team owned by a billionaire who could literally write the check.
But there’s another reason New York Governor Hochul wasn’t sweating the budget and felt secure in her position to negotiate this behind closed doors, then deliver it to the state legislature just days before she announced the budget. And by the way, for all of his bullshit, even Andrew Cuomo had moved past the days of backroom budgeting.
Don’t worry. He’s still an asshole.
Recall that Erie County agreed to pick up $250 million of the government’s pledge to raise $850 million. That leaves the state to come up with $600 million. Here’s where it gets really dicey.
The Seneca Nation in western New York operates a casino and resort operation that has contributed more than a billion dollars in revenue to New York State since 2002. I’ll get into the history of this agreement in a bit, but the crucial intersection of our story centers around a dispute between the Seneca Nation and the state since the expiration of a compact between the two in 2017.
At the beginning of this year, tribal leaders from Seneca were negotiating with the Hochul administration over a dispute regarding the termination language in the compact. Since 2017, the nation has been putting disputed funds into an escrow account awaiting arbitration from the courts and the federal government. The accumulated funds have grown since this time to more than $500 million.
In addition to the history of the agreement and where things broke down, I’m going to get into why the nation doesn’t owe a fucking penny to the state. But first, to be clear, the nation agreed to enter into a new compact with the state that included relinquishing its share of the funds from the disputed escrow account at the beginning of the year.
So everything seemed to be moving in Hochul’s favor at this point as she was able to make headway with the nation where Cuomo had previously failed. New York had beaten the tribe in arbitration and this decision was upheld in the New York courts. Also, bullshit but hang tight. So as far as the courts were concerned, the nation was backed into a corner so it agreed to move forward in good faith with Hochul on a new agreement.
But before the nation agreed to ink a new deal and release the funds, it petitioned the Department of Interior to review the case as the compact and any disputes are ultimately the purview of the federal government, since it’s an agreement between sovereign states. The Biden Interior Department, now under the leadership of Deb Haaland - the first Native person to ever hold the position - agreed to review it in mid-February.
Understand that the tribe wasn’t bucking the courts or the state. Did it think the rulings were unfair and unlawful? Sure. That’s why they petitioned the federal government who is supposed to intervene in such affairs between sovereign states. Unfortunately for the Senecas, Hochul was secretly running out of time because, as we now know, she was about to commit the state to $600 million in funds that it didn’t allocate in the budget. So instead of waiting for any comment or decision from the Department of the Interior, in March of this year Hochul petitioned KeyBank, the most prominent bank in the area controlling most of the nation’s personal and business assets, to freeze the nation’s bank accounts.
She didn’t grab the money from escrow. There was no mechanism to do that. No, she got the courts to compel KeyBank to freeze the personal and business accounts of the nation. Effectively, these were economic sanctions on a sovereign nation. In an instant, tribal members and tribal businesses had their accounts and assets frozen. Paying for that prescription? Writing a check to a vendor? Paying your daycare provider? Buying groceries? To quote Goodfellas, “fuck you, pay me.”
This gangster fuck froze the assets and accounts of the people. Sanctioned them. That’s economic fucking terrorism. So the nation, with no response from the federal government and shit out of luck in the white man’s court system, and a commercial bank with a gun to their heads, had no choice but to release the funds to a triumphant Hochul who needed the money for her precious fucking billionaire scheme. And the only media reporting on it is the local Buffalo media who has absolutely no sympathy for the Seneca Nation.
So now let’s connect even more dots and explain why this whole fucking thing is fubar from the start.
Chapter Three: The Tangled Web of F*ckery
Let’s talk about Hochul’s connection to all of this. Like…her husband. William Hochul, a former high profile prosecutor is now a senior executive and counsel for a company called Delaware North. Because of this connection, Governor Hochul has agreed to recuse herself from any discussions related to concessions at the new Bills stadium because Delaware North is the official concession provider at Bills stadium. They make a shit ton of money there.
You know what else Delaware North does?
They’re also considered one of the nation’s premier gaming companies with gaming operations all over the country. In fact, they also operate machines called video lottery terminals (VLT) - a fancy word for slot machines the state uses to get around the terminology of slot machines that would be in clear violation of their own gaming laws and exclusivity rights granted native casino operators. And it just so happens that Delaware North operates these video lottery machines at a racetrack, called a “racino,” in the Finger Lakes which is within the Seneca nation’s territory of exclusivity.
Let me quickly run through how these agreements are structured so we can better understand the position of the Seneca.
First off, it’s obscene that any sovereign tribal nation should even require U.S. government approval at any level to run gaming operations. It was one of the biggest questions I had when reporting on the New York tribes back in the day. And it was an elder at Oneida who finally broke it down for me basically saying that the laws governing gaming are unilateral.
The U.S. government never wanted to allow something as lucrative as gaming on tribal land because it would fuck the original centers of gambling in the country like Nevada and New Jersey. Then states figured out that if they wanted to look like they were helping First Nations with economic development while really just using them as a backdoor into the gaming world, they could grant different types of licenses to federally recognized tribes. There are different classes of gaming from slots, bingo, lotteries, sports and all the way to games of chance - the table games and card games we typically associate with casinos.
Anyway, so I understood why certain states made these deals but couldn’t understand what prohibited tribes from opening up a casino without so-called “permission” and telling the U.S. government to fuck off. That’s where the Oneida elder finally set me straight. He said there’s technically nothing stopping them from doing it. Except that no supplier in their right minds would help them. No bank could possibly finance the construction. Even a wealthy individual who didn’t require financing wouldn’t be able to procure the equipment, the security systems, hospitality infrastructure or the slot machines - which are the real cash cow - because those companies wouldn’t supply them out of fear of losing contracts off reservation.
So I get that, but it was the example that he used that is burned in my memory that tweaked me so bad. He said something to the effect of, “a company like Delaware North would never sell us the gaming equipment we need because it’s too risky for them.”
Bottom line is that these sovereign nations have to procure a gaming license from the federal government then go hat-in-hand to their local municipalities to work out deals. Now, understand that a state cannot profit from a native operation directly. That’s against the law. So they work out “contributions” instead. Tribute for allowing them to operate and exist. But in order to effectuate such a quid pro quo, there has to be a defined and favorable benefit to the native operation. In this case, it was territorial exclusivity on Class III gaming.
The Seneca deal had the nation forking over a percent of the gross total of the gaming operations for 15 years. (Remember what I said about them not being able to directly profit from native operations.) Now let me quote directly from the compact to be extremely clear:
“The nation shall have total exclusivity with respect to the installation and operation of, and no person or entity other than the Nation shall be permitted to install or operate, Gaming devices, including slot machines, within the geographic area defined by: (i) to the east, State Route 14 from Sodus Point to the Pennsylvania border with New York; (ii) to the north, the border between New York and Canada; (iii) to the south, the Pennsylvania border with New York; and (iv) to the west, the border between New York and Canada and the border between Pennsylvania and New York.”
Okay, so that relates to their exclusivity. The agreement calls for the following payments of gross revenue - which is fucking insane on its own by the way, no one pays off the gross of anything it’s always net - to New York State.
Years 1 to 4 - 18% annual payments
Years 5 to 7 - 22% semi-annual payments
Years 8 to 14 - 25% quarterly payments
Now, here’s the key. There is a provision that allows for a seven year extension of the compact assuming no material breaches. Seven years of the compact, which is the authorization to operate. Remember that the state can’t be a financial partner in this. So the nation interpreted this as it was originally intended and ceased making the payments because the payments were always finite as contributions. And those contributions - by the fucking way - totaled over a billion dollars over 14 years.
There is no language that talks about payments in the extension term. On this the agreement couldn’t be more clear. Payments are only contemplated through 14 years, nothing more. So the Seneca nation stopped paying and the state sued them. Fine. That’s business. But the Seneca Nation fired back by explaining that not only did they hold up their end of the bargain but the state had been violating the terms of the original agreement the entire time by encroaching on their exclusivity.
On top of the racinos with slot machines, at the very fucking moment the initial agreement ended the state allowed a fucking full-fledged casino called Del Lago to open in western New York. (You can’t tell me that the very second this agreement expired and they licensed a casino in the Seneca’s backyard that they weren’t keenly aware of the exclusivity language.)
Now go back to Hochul freezing Seneca’s accounts for a second. She got the court order to freeze the tribes’ accounts at KeyBank. KeyBank is one of the most prominent banks in upstate New York. In fact, it even has a naming rights agreement with the complex that the Buffalo Sabres hockey team plays in, paying the Sabres a little over $1 million dollars a year. And as we mentioned, the Sabres are owned by Terry Pegula, the same billionaire who owns the Bills.
So you have a governor who froze the assets of a nation at a bank that has business dealing with a billionaire sports team owner who is negotiating a backroom secret deal with that same governor whose husband’s company derives significant revenue from said billionaire. And they used their own courts to press their agenda before getting word back from the federal government all the while flagrantly in breach of their own shitty fucking contract.
But you won’t read any of this in the white media. No one is crying for the Seneca population, of course. They have gaming. Truth is the majority of native gaming operations in the country barely turn a profit. I mean barely. Partly because of shit deals like this, but mostly because they operate in the most remote parts of the country that we’ve forced them to live in. That was the whole point of the reservation system. Put them out of sight and out of mind. So of course nothing thrives on most native territories.
But we act like we did them such a fucking favor and when there is a successful operation like the one on Seneca land, we fuck them in the ass over and over while they hold up their end of the bargain the entire time. They’re one of the largest employers in upstate New York and they’ve been making it happen on just 75% of the take, which is unheard of. And now along comes a brand new fucking governor with so many conflicts of interest it’s laughable and she basically tears up the entire history and agreement and says fuck you, pay me.
Which is another thing that Harry Wallace, our partner from Poospatuck used to tell me. One of the biggest frustrations of our system where native people are concerned is the turnover. Every couple of years it’s a new fucking dickhead and everything starts all over again. Every day is Groundhog Day when native people negotiate with white government.
So there you have it. That’s my fucking screed. The story of a democratic governor’s backroom deal to fuck the taxpayers and a native tribe to help a billionaire and her husband. Welcome to New York.
Fuck Kathy Hochul and her fucking husband.
Fuck Terry Pegula.
And Fuck the media for keeping Native people invisible.
Here endeth the lesson.
Support First Nation’s Causes
There are a number of charitable organizations that support First Nation’s causes (see a few below). However, I’m a firm believer in local support and making connections with First Nation’s peoples. If possible, endeavor to get in touch with the community center at the nearest tribal territory and inquire as to the best way to provide direct support to maximize impact.
The New York Times: Buffalo Bills Strike Deal for Taxpayer-Funded $1.4 Billion Stadium
The Atlantic: Sports Stadiums Are a Bad Deal for Cities
Sports Illustrated: Austin Bills? NFL owners are running out of stadium grift ideas
Bloomberg: Terry Pegula - Bloomberg Billionaires Index
Forbes: #32 Buffalo Bills
Delaware North: Finger Lakes Gaming & Racetrack
CDC Gaming Reports: Churchill Downs announces deal for Peninsula Pacific assets
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